| Wed 28 Mar 2007, 15:58 | | SAC/SRL - SA Corporate/SA Retail - SA Corporate di |
|
SAC SRL
SAC SRL
SAC/SRL - SA Corporate/SA Retail - SA Corporate distributions forecast to grow
17,6% in 2007
SA Corporate Real Estate Fund
(formerly Martprop Property Fund)
(Incorporated in the Republic of South Africa)
Share Code: SAC & ISIN Code: ZAE000083614
A Collective Investment Scheme in property registered in terms of the Collective
Investment Schemes Control Act, No. 45 of 2002 and managed by
SA Corporate Real Estate Fund Managers Limited
(formerly Marriott Property Fund Managers Limited) (Registration number
1994/009895/06)
("SA Corporate" or "the Fund")
SA Retail Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/025764/06)
Share Code: SRL & ISIN Code: ZAE000034328
("SA Retail")
SA CORPORATE DISTRIBUTIONS FORECAST TO GROW 17,6% IN 2007
Distributions by SA Corporate Real Estate Fund are forecast to grow by 17,6% in
2007 to 31,55 cents per unit due to the offer by the fund for all the
linked units in SA Retail Properties Ltd. This will come on the back of the
18% distribution growth shown in the last distribution declared.
The merger of the two funds, and the proposed inclusion of the R1 billion
Sharemax portfolio of 10 retail properties, is set to create a R7 billion,
diversified fund that will be third largest in the listed property sector.
Distributions by SA Corporate in 2007 will be enhanced by more than two cents
through the deal structure, according to a circular today (March 28) to SA
Corporate unitholders to approve the transaction.
The SA Corporate offer of 3,05 units for every one SA Retail linked unit has the
backing of 97,27% of SA Retail unitholders. The alternative to the unit
offer is R10,50 plus interest.
Craig Ewin, head of listed real estate at Old Mutual Investment Group- Property
Investments, which manages both funds, says SA Corporate unitholders will
share the SA Retail distribution from October 1 to December 31, 2006 as a
result of the structure of the transaction. Of the forecast distribution
growth , 7,5% relates to the structure of the deal, he says.
"The effects of this kicker can be expected to be fully felt in the interim
distribution to be declared by SA Corporate in August this year. The
forecast assumes that the SA Retail acquisition of the Sharemax portfolio
is concluded and that this will roll up into SA Corporate."
Ewin says SA Retail has 52% irrevocable commitments to vote in favour of the
Sharemax acquisition at a meeting on April 5, and SA Corporate already has
support from 55% of its unitholders to approve the acquisition of SA Retail
on April 12. The offer to SA Retail, and the acquisition of SA Retail by SA
Corporate, have the backing of the respective boards.
He says the size of the fund once the acquisition is concluded should ease the
way for further meaningful acquisitions and capital inflows, from both
local and international investors.
"SA Corporate has already seen a re-rating of its stock, as investors anticipate
the merger and expect SA Corporate to trade at the same yield as funds of
similar size.
"The high level of acceptance for the SA Corporate unit offer is not
surprising, as it is 19% higher than the cash offer, excluding interest. SA
Retail unitholders will see significant improvement in the liquidity of
their stock as SA Corporate has traded more than 60% of its units in each
of the last two years."
The SA Corporate offer to SA Retail unitholders will close on April 26 and the
results will be released on April 30.
ends
Date: 28/03/2007 15:58:03 Produced by the JSE SENS Department.
